Members are advised that a revised Bye Law 14, Investment Business Regulations, became effective from 14th October 2019.
The regulations have been updated to reflect the transposition of the Insurance Distribution Directive. The key change is the removal of references to “insurance products” throughout the regulations. Since the 1st October 2018, CPA firms that are involved actively in advising on or arranging insurance products, including insurance-based life and pension products, must be registered for such activities directly by the Central Bank of Ireland. The holding of CPA investment business authorisation will no longer authorise a firm to provide advice or arrange such insurance products.
Firms should note that where a firm introduces or refers a client to a third party for the purposes of arranging the purchase of an insurance product and that firm has no further role in the transaction, that firm will not be required to be registered with the Central Bank. This is because the act of introduction or referral in respect of an insurance product does not fall within the definition of ‘insurance distribution’ and is not subject to the IDD.
So if a firm currently holds IIA authorisation from CPA Ireland solely because it makes referrals to a third party for advice on or for the purpose of arranging insurance-based products and does not conduct any other type of investment business, then that firm is likely to no longer require investment business authorisation. However, this will be a matter for the firm to decide.
The scope of the IDD is confined to insurance products only. Firms that currently hold investment business authorisation and make referrals to third parties in respect of other types of investments or for investment advice (e.g., to a stockbroker), or are active themselves in carrying on investment business will continue to require authorisation – either from CPA Ireland or directly from the Central Bank in respect of such activities.